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Dismissal Protection and Worker Flows in Small Establishments

  • Bauer, Thomas K.

    ()

    (RWI)

  • Bender, Stefan

    ()

    (Institute for Employment Research (IAB), Nuremberg)

  • Bonin, Holger

    ()

    (ZEW Mannheim)

Based on a large employer-employee matched data set, the paper investigates the effects of variable enforcement of German dismissal protection legislation on the employment dynamics in small establishments. Specifically, using a difference-in-differences approach, we study the effect of changes in the threshold scale exempting small establishments from dismissal protection provisions on worker flows. In contrast to the predictions of the theory, our results indicate that there are no statistically significant effects of the dismissal protection legislation on worker turnover.

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File URL: http://ftp.iza.org/dp1105.pdf
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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1105.

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Length: 38 pages
Date of creation: Apr 2004
Date of revision:
Publication status: published in: Economica, 2007, 74 (296), 804-821
Handle: RePEc:iza:izadps:dp1105
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